Iowa, the Duane Arnold Nuclear Power Plant northwest of Cedar Rapids, is pushing plans to reopen by the end of the decade after closing in 2020 for economic reasons.
The plant is the third and perhaps the last fledgling reactor formed to return online in the US and support the growing electricity demand in the US.
Duane Arnold is subject to approval from the Nuclear Regulation Commission later this year and in 2027 following a similar reboot planned for the Pallisard Nuclear Power Plant in Michigan and Three Mile Island in Pennsylvania.
The Federal Energy Regulation Commission approved requests from last week nextera energy, Owner of Duane Arnold, Reconnect the nuclear plant to the electrical grid. Nextera is looking at Duane Arnold, who has resumed operations by the fourth quarter of 2028, according to a FERC filing.
“While there is a significant amount of work to be done before the facility is reopened, FERC’s decision is another positive step in the process,” Nextera spokesman Neil Nissan said in a statement to CNBC.
Power purchase agreement
As the leading technology companies are trying to fuel the electricity-hungry data centers they’re building to supply more nuclear power to the grid and train artificial intelligence, Florida-based Nextera aims to win a lucrative power purchase agreement to reopen Duane Arnold. For example, Three Mile Island is rebooting with financial support from a power contract with Microsoft.
“The recommendation of Duane Arnold has received significant commercial benefits from American premier companies,” Garrett Goldfinger, executive at Nextera, who is responsible for the reboot project, told FERC in late July.
Duane Arnold brings more than 600 megawatts of power back into the grid, equivalent to the power needs of more than 400,000 homes.
“If it succeeds in moving Duane forward, it clearly creates a warm bed of data center activity around that facility,” Nextera CEO John Ketchum told investors during the company’s July revenue call.
“Unicorn Opportunity”
Duane Arnold, Palisade and the three-mile island are three of the 10 US nuclear reactors that have been shut down in the past decade as nuclear power plants have been strained to compete with cheap natural gas and renewables.
Reopening these plants is the most specific indication that the nuclear industry is returning after years of economic struggle.
“These are unique opportunities as we are not facing new build costs associated with the nuclear,” Ketchum said in a revenue call for Nextera. “These are really unicorn type opportunities.”
Nextera, the largest renewable power developer in the United States, previously splitting Duane Arnold’s grid connections between multiple solar farms the company was developing in response to Iowa’s low-cost electricity demands.
However, last year’s markets began to return to favor large-capacity nuclear power generation as the US saw an unprecedented increase in electricity demand from industry and data centers, Nextera said in a filing with FERC.
Nextera now returns the solar grid connections of Duane Arnold to one after securing FERC approval. This “provides commercial and economic certainty to support the recommendations efforts and to encourage the reopening of clean, reliable operations at Duane Arnold,” Goldfinger told FERC.
Capital-intensive
Nextera said the restart of Duane Arnold will be a “highly capital-intensive process.” In its submission to FERC, it has revealed that it plans to spend as much as $100 million on the project in 2025 alone.
Nextera ordered a new transformer to replace what was removed when the plant was closed, but the transformer faces large supply chain constraints and takes about three years to deliver. The factory’s cooling towers, management buildings and training centres have also been demolished and need to be replaced.
Goldfinger warns that the nuclear industry has a long history of project delays, and if, for example, transformers are delivered late, a reboot of Duane Arnold could take longer than expected.
Although there are risks, Duane Arnold represents the economic opportunity for Nextera, the parent company of Florida Power & Wright. This year, stocks have barely moved despite rising electricity demand. This is a sharp turnaround from 2024, when stocks rose 18% since taking office in January, and President Donald Trump’s repeated attacks on renewables have shaken up investors’ confidence in the solar and wind power.
The Solar and Wind Project will be eligible for two major tax credits from 2027 onwards. A reboot of Duane Arnold in 2028 could offset some of the lost revenue from the tax credit phase-out, Ketchum said in its July revenue call.
“You add Duane Arnold to the mix, which is one of many ways you have to continue growing your business in the future,” Ketchum said.
